LendingTree Reveals Cities Where Borrowers Save the Most by Shopping Around for Mortgage Loans

New LendingTree study analyzes the savings available by comparing mortgage rates across the country

News provided by

LendingTree

May 08, 2018, 11:30 ET

CHARLOTTE, N.C., May 8, 2018 /PRNewswire/ -- LendingTree®, the nation's leading online loan marketplace, today released its Mortgage Rate Competition Indexes for the 50 largest cities in the U.S. to assess how different markets behave across the country. Each week, LendingTree releases the Mortgage Rate Competition Index, a gauge that shows consumers how much they stand to save by comparing rates when they apply for a mortgage. The index is calculated on a national level to give an indication of the general dispersion of mortgage rates throughout the United States.

The national index is calculated weekly, and the city indexes are calculated on a quarterly basis. Below are the key findings of the Mortgage Rate Competition Indexes by city.

  • Tampa, Kansas City, Portland and New York are the cities where homebuyers saw the biggest rate savings by comparing competing offers. Rates in Tampa had a range of 0.62 followed by Kansas City, Portland and New York at 0.61.
  • California is where comparing mortgage offers before buying saved the most money. By comparing offers and securing a lower rate, you're automatically saving money over the term of your mortgage. Larger loan sizes fuel savings of $65,030 in San Francisco, $42,659 in Los Angeles and $42,315 in San Diego.
  • Significant savings for purchase borrowers in every city. The index ranges from 0.49 in Tulsa to 0.62 in Tampa.
  • Monthly savings up to $254. For borrowers in San Francisco, a spread of 0.58 translates into a potential savings of $254 per month given the median home price of $900,000 — the highest monthly savings found.
  • Even less expensive cities register meaningful savings. In Detroit, a low median home price of $150,000 and narrow spread of 0.54 still add up to $9,952 in lifetime interest savings. Only Tulsa joins Detroit in having savings below $10,000.
  • The proof is in the pudding. LendingTree's method uses median values, so half of borrowers would see smaller savings, but just as importantly, half could see larger savings. There is no way for a borrower to know where they fall in this spectrum without shopping around, so it is imperative to compare lenders and assess their offers.
  • Competition is influenced by the density of bank branches. Cities with fewer banks per capita had wider refinance indexes.

The metros where PURCHASE borrowers face the LARGEST differences in purchase mortgage rates.

Tampa, Fla.
Purchase Mortgage Rate Competition Index: 0.62 
With a median home price of $225,000 borrowers here could save $67 in monthly payments adding up to $809 a year. Lifetime interest savings would be $17,291.

Kansas City, Mo.
Purchase Mortgage Rate Competition Index: 0.61 
With a median home price of $197,800 borrowers here could save $59 in monthly payments adding up to $705 a year. Lifetime interest savings would be $15,061.

Portland, Ore.
Purchase Mortgage Rate Competition Index: 0.61 
With a median home price of $276,400 borrowers here could save $82 in monthly payments adding up to $983 a year. Lifetime interest savings would be $21,011.

The metros where PURCHASE borrowers could save the MOST in lifetime interest expense.

San Francisco
Lifetime Interest Expense Savings: $65,030 
An index of 0.58 and median home price of $900,000 adds up to savings of $254 in monthly payments, totaling $3,046 a year. The calculation assumes an 80% LTV.

Los Angeles
Lifetime Interest Expense Savings: $42,659 
An index of 0.58 and median home price of $595,100 adds up to savings of $167 in monthly payments, totaling $1,998 a year.

San Diego
Lifetime Interest Expense Savings: $42,315 
An index of 0.56 and median home price of $607,000 adds up to savings of $165 in monthly payments, totaling $1,983 a year.

What drives the difference in the competition index across cities?
Different lenders operate in different parts of the country, and even national lenders have different strategies in different areas. To try and assess the number of lenders in each metro, LendingTree looked at the density of bank branches. That is, the number of bank branches divided by the population. Even though the mortgage market is now almost evenly divided between non-banks and banks, and many loan originations are now online, the distribution of bank branches is still indicative of how competitive financial services are.

The findings revealed that in the refinance market, cities with fewer bank branches had wider spreads in rates. This relationship did not hold for purchase mortgages. Refinance transactions tend to be more price-sensitive, as the loan is the primary product. In a purchase transaction, the loan, though essential, is a secondary product to the home and thus less price (interest rate)-sensitive.

May 8, 2018 National Mortgage Rate Competition Index: Mortgage Borrowers Could Save Almost 10 Percent of the Loan Amount in Interest by Shopping Around

Purchase loans

  • Across all purchase loan applications on LendingTree for the week ending May 6, 2018, the index was 0.63, down 0.02 from the previous week.
  • How big of a deal is it to get a mortgage rate that's 0.63% lower than the competition? Over 30 years, that could translate to $29,273 in savings on a $300,000 loan —nearly 10% of the total loan amount.

Refinances

  • The index was wider than the purchase market in the refinance market at 0.67, down 0.01 from the prior week.
  • Using the same assumptions in the previous example, borrowers shopping for refi loans could have saved $31,098 by shopping for the lowest rate.

Other findings

  • Average savings in 2018 are outpacing 2017 savings, up to $28,000 from $21,000 for purchase mortgages. Refinance loan savings are up to $30,000 from $26,000.
  • The Mortgage Rate Competition has widened as rates increased, reflecting how mortgage lenders have unique business circumstances that impact how they change the rates at which they can offer consumers loans.

To view the full Weekly Mortgage Competition Index, visit https://www.lendingtree.com/home/mortgage/rates/mortgage-rate-competition-index-may-8/.

What is the Mortgage Rate Competition Index?
The LendingTree Mortgage Rate Competition Index is a new proprietary measure of the dispersion in mortgage pricing. It measures the spread in the APR of the best offers available on LendingTree relative to the least competitive (i.e. the highest) rates. Our research shows that mortgage rate competition varies with the financial and operational measures of activity in the mortgage markets. More details on the index are available in a white paper on LendingTree's website.

How is the index formulated?
A mortgage shopper enters their information on LendingTree.com. They input loan variables including the proposed amount and down payment, property variables including property type and location and personal information including income. LendingTree transmits this data, including a soft credit inquiry, to lenders who evaluate the borrower against their lending parameters in their pricing engines. Interested lenders return a rate and fee offer. For our index, we combine the rate and fees into an APR and calculate the spread as follows:

Offers

APR

Lender 1

4.21

Lender 2

4.33

Lender 3

4.4

Lender 4

4.55

Lender 5

4.62

The spread is the difference between the highest and lowest offers, in this example, 4.62-4.21 = 0.41. We repeat this calculation across 30-year fixed rate loans and then find the median of the individual spread, which is our index value. This is done separately for the population of purchase and refinance loan requests.

To view the full Mortgage Rate Competition Indexes for the 50 largest cities in the U.S., visit https://www.lendingtree.com/home/mortgage/cities-where-borrowers-save/. 

Purchase Ranked by Mortgage Rate Competition Index

Rank

City

Mortgage
Rate
Competition
Index

Monthly
Payment
Savings

Annual
Payment
Savings

Lifetime
Interest
Savings

Median
Home
Price

1

Tampa, Fla.

0.62

$67

$809

$17,291

$225,000

2

Kansas City, Mo.

0.61

$59

$705

$15,061

$197,800

3

Portland, Ore.

0.61

$82

$983

$21,011

$276,400

4

New York

0.61

$117

$1,403

$29,964

$395,500

5

Orlando, Fla.

0.60

$72

$869

$18,560

$247,900

6

Miami

0.60

$99

$1,190

$25,412

$340,000

7

Denver

0.60

$121

$1,456

$31,089

$418,100

8

Jacksonville, Fla.

0.60

$52

$626

$13,360

$180,600

9

Sacramento, Calif.

0.60

$101

$1,208

$25,802

$350,000

10

Phoenix

0.59

$71

$856

$18,286

$248,900

11

Cleveland

0.59

$42

$502

$10,726

$146,000

12

Memphis, Tenn.

0.59

$49

$589

$12,578

$172,700

13

Milwaukee

0.59

$70

$838

$17,903

$246,900

14

Richmond, Va.

0.58

$73

$877

$18,724

$258,900

15

San Francisco

0.58

$254

$3,046

$65,030

$900,000

16

Atlanta

0.58

$58

$691

$14,749

$204,300

17

St. Louis

0.58

$50

$596

$12,719

$176,500

18

San Antonio

0.58

$62

$744

$15,877

$220,700

19

Los Angeles

0.58

$167

$1,998

$42,659

$595,100

20

Philadelphia

0.57

$66

$796

$16,988

$238,900

21

Seattle

0.57

$132

$1,590

$33,935

$478,500

22

Boston

0.57

$128

$1,542

$32,914

$464,100

23

Austin, Texas

0.57

$82

$985

$21,021

$296,400

24

Dallas

0.57

$69

$823

$17,564

$249,000

25

Bakersfield, Calif.

0.57

$64

$772

$16,476

$234,000

26

Washington

0.57

$112

$1,343

$28,659

$408,500

27

Chicago

0.57

$70

$840

$17,932

$255,600

28

Pittsburgh

0.57

$58

$697

$14,873

$212,000

29

Birmingham, Ala.

0.57

$54

$653

$13,940

$198,700

30

Minneapolis

0.56

$70

$843

$17,988

$257,800

31

Houston

0.56

$64

$765

$16,320

$233,900

32

San Diego

0.56

$165

$1,983

$42,315

$607,000

33

Nashville, Tenn.

0.56

$64

$765

$16,333

$234,300

34

Indianapolis

0.56

$47

$567

$12,109

$173,700

35

Fresno, Calif.

0.56

$65

$780

$16,655

$240,000

36

Grand Rapids, Mich.

0.56

$49

$587

$12,518

$182,400

37

Hartford, Conn.

0.55

$64

$764

$16,292

$238,700

38

Charlotte, N.C.

0.55

$71

$852

$18,179

$267,100

39

Raleigh, N.C.

0.55

$71

$852

$18,172

$267,500

40

Salt Lake City

0.55

$77

$925

$19,737

$293,000

41

Cincinnati

0.54

$44

$531

$11,327

$169,100

42

Albuquerque, N.M.

0.54

$53

$632

$13,478

$201,600

43

Oklahoma City

0.54

$41

$497

$10,601

$158,800

44

Las Vegas

0.54

$68

$815

$17,390

$261,600

45

Detroit

0.54

$39

$467

$9,952

$150,000

46

Greenville, S.C.

0.53

$44

$528

$11,262

$170,600

47

Columbus, Ohio

0.52

$45

$534

$11,397

$176,500

48

Charleston, S.C.

0.52

$67

$802

$17,102

$267,100

49

New Orleans

0.52

$51

$610

$13,012

$204,300

50

Tulsa, Okla.

0.49

$39

$468

$9,977

$163,800

Purchase Ranked by Lifetime Interest Expense (Assumes 80% LTV)

Rank

City

Mortgage
Rate
Competition
Index

Monthly
Payment
Savings

Annual
Payment
Savings

Lifetime
Interest
Savings

Median
Home
Price

1

San Francisco

0.58

$254

$3,046

$65,030

$900,000

2

Los Angeles

0.58

$167

$1,998

$42,659

$595,100

3

San Diego

0.56

$165

$1,983

$42,315

$607,000

4

Seattle

0.57

$132

$1,590

$33,935

$478,500

5

Boston

0.57

$128

$1,542

$32,914

$464,100

6

Denver

0.60

$121

$1,456

$31,089

$418,100

7

New York

0.61

$117

$1,403

$29,964

$395,500

8

Washington

0.57

$112

$1,343

$28,659

$408,500

9

Sacramento, Calif.

0.60

$101

$1,208

$25,802

$350,000

10

Miami

0.60

$99

$1,190

$25,412

$340,000

11

Austin, Texas

0.57

$82

$985

$21,021

$296,400

12

Portland, Ore.

0.61

$82

$983

$21,011

$276,400

13

Salt Lake City

0.55

$77

$925

$19,737

$293,000

14

Richmond, Va.

0.58

$73

$877

$18,724

$258,900

15

Orlando, Fla.

0.60

$72

$869

$18,560

$247,900

16

Phoenix

0.59

$71

$856

$18,286

$248,900

17

Charlotte, N.C.

0.55

$71

$852

$18,179

$267,100

18

Raleigh, N.C.

0.55

$71

$852

$18,172

$267,500

19

Minneapolis

0.56

$70

$843

$17,988

$257,800

20

Chicago

0.57

$70

$840

$17,932

$255,600

21

Milwaukee

0.59

$70

$838

$17,903

$246,900

22

Dallas

0.57

$69

$823

$17,564

$249,000

23

Las Vegas

0.54

$68

$815

$17,390

$261,600

24

Tampa, Fla.

0.62

$67

$809

$17,291

$225,000

25

Charleston, S.C.

0.52

$67

$802

$17,102

$267,100

26

Philadelphia

0.57

$66

$796

$16,988

$238,900

27

Fresno, Calif.

0.56

$65

$780

$16,655

$240,000

28

Bakersfield, Calif.

0.57

$64

$772

$16,476

$234,000

29

Nashville, Tenn.

0.56

$64

$765

$16,333

$234,300

30

Houston

0.56

$64

$765

$16,320

$233,900

31

Hartford, Conn.

0.55

$64

$764

$16,292

$238,700

32

San Antonio

0.58

$62

$744

$15,877

$220,700

33

Kansas City, Mo.

0.61

$59

$705

$15,061

$197,800

34

Pittsburgh

0.57

$58

$697

$14,873

$212,000

35

Atlanta

0.58

$58

$691

$14,749

$204,300

36

Birmingham, Ala.

0.57

$54

$653

$13,940

$198,700

37

Albuquerque, N.M.

0.54

$53

$632

$13,478

$201,600

38

Jacksonville, Fla.

0.60

$52

$626

$13,360

$180,600

39

New Orleans

0.52

$51

$610

$13,012

$204,300

40

St. Louis

0.58

$50

$596

$12,719

$176,500

41

Memphis, Tenn.

0.59

$49

$589

$12,578

$172,700

42

Grand Rapids, Mich.

0.56

$49

$587

$12,518

$182,400

43

Indianapolis

0.56

$47

$567

$12,109

$173,700

44

Columbus, Ohio

0.52

$45

$534

$11,397

$176,500

45

Cincinnati

0.54

$44

$531

$11,327

$169,100

46

Greenville, S.C.

0.53

$44

$528

$11,262

$170,600

47

Cleveland

0.59

$42

$502

$10,726

$146,000

48

Oklahoma City

0.54

$41

$497

$10,601

$158,800

49

Tulsa, Okla.

0.49

$39

$468

$9,977

$163,800

50

Detroit

0.54

$39

$467

$9,952

$150,000

Refinance Ranked by Mortgage Rate Competition Index

Rank

City

Mortgage
Rate
Competition
Index

Monthly
Payment
Savings

Annual
Payment
Savings

Lifetime
Interest
Savings

Median
Home
Price

1

New Orleans

0.72

$71

$856

$18,335

$204,300

2

Salt Lake City

0.72

$102

$1,226

$26,258

$293,000

3

Indianapolis

0.69

$58

$693

$14,818

$173,700

4

Seattle

0.69

$159

$1,906

$40,788

$478,500

5

Raleigh, N.C.

0.68

$88

$1,061

$22,699

$267,500

6

Fresno, Calif.

0.68

$75

$901

$19,278

$228,400

7

Dallas

0.68

$82

$980

$20,969

$249,000

8

Houston

0.68

$77

$921

$19,697

$233,900

9

Phoenix

0.68

$82

$978

$20,929

$248,900

10

Denver

0.68

$137

$1,641

$35,102

$418,100

11

Bakersfield, Calif.

0.67

$76

$916

$19,601

$234,000

12

Charlotte, N.C.

0.67

$87

$1,045

$22,356

$267,100

13

Austin, Texas

0.67

$97

$1,158

$24,770

$296,400

14

Louisville, Ky.

0.67

$57

$681

$14,571

$175,700

15

Boston

0.67

$149

$1,794

$38,368

$464,100

16

San Antonio

0.67

$71

$853

$18,246

$220,700

17

Tampa, Fla.

0.66

$72

$868

$18,572

$225,000

18

Atlanta

0.66

$66

$787

$16,838

$204,300

19

Portland, Ore.

0.66

$89

$1,064

$22,744

$276,400

20

Jacksonville, Fla.

0.66

$58

$695

$14,861

$180,600

21

Grand Rapids, Mich.

0.66

$75

$898

$19,195

$234,000

22

Miami

0.66

$109

$1,302

$27,847

$340,000

23

Orlando, Fla.

0.66

$79

$949

$20,288

$247,900

24

Minneapolis

0.66

$82

$984

$21,048

$257,800

25

Sacramento, Calif.

0.65

$110

$1,326

$28,352

$350,000

26

Cincinnati

0.65

$53

$641

$13,698

$169,100

27

Hartford, Conn.

0.65

$75

$904

$19,321

$238,700

28

Los Angeles

0.65

$187

$2,244

$47,978

$595,100

29

Philadelphia

0.65

$75

$901

$19,260

$238,900

30

San Diego

0.65

$190

$2,278

$48,704

$607,000

31

Detroit

0.64

$47

$561

$11,997

$150,000

32

San Francisco

0.64

$279

$3,346

$71,522

$900,000

33

Richmond, Va.

0.64

$80

$956

$20,442

$258,900

34

New York

0.63

$120

$1,446

$30,899

$395,500

35

Washington

0.63

$124

$1,490

$31,836

$408,500

36

Nashville, Tenn.

0.63

$71

$854

$18,260

$234,300

37

Columbus, Ohio

0.63

$54

$644

$13,755

$176,500

38

Milwaukee

0.63

$75

$899

$19,210

$246,900

39

Chicago

0.63

$77

$928

$19,822

$255,600

40

Pittsburgh

0.63

$64

$769

$16,441

$212,000

41

Albuquerque, N.M.

0.63

$61

$732

$15,634

$201,600

42

St. Louis

0.63

$53

$641

$13,688

$176,500

43

Memphis, Tenn.

0.63

$52

$627

$13,393

$172,700

44

Greenville, S.C.

0.63

$52

$619

$13,230

$170,600

45

Oklahoma City

0.63

$48

$576

$12,315

$158,800

46

Cleveland

0.63

$44

$530

$11,322

$146,000

47

Tulsa, Okla.

0.61

$48

$578

$12,358

$163,800

48

Kansas City, Mo.

0.59

$56

$673

$14,380

$197,800

49

Birmingham, Ala.

0.56

$65

$784

$16,731

$240,000

50

Las Vegas

0.52

$66

$788

$16,793

$261,600

Refinance Ranked by Lifetime Interest Expense (Assumes 80% LTV)

Rank

City

Mortgage
Rate
Competition
Index

Monthly
Payment
Savings

Annual
Payment
Savings

Lifetime
Interest
Savings

Median
Home
Price

1

San Francisco

0.64

$279

$3,346

$71,522

$900,000

2

San Diego

0.65

$190

$2,278

$48,704

$607,000

3

Los Angeles

0.65

$187

$2,244

$47,978

$595,100

4

Seattle

0.69

$159

$1,906

$40,788

$478,500

5

Boston

0.67

$149

$1,794

$38,368

$464,100

6

Denver

0.68

$137

$1,641

$35,102

$418,100

7

Washington

0.63

$124

$1,490

$31,836

$408,500

8

New York

0.63

$120

$1,446

$30,899

$395,500

9

Sacramento, Calif.

0.65

$110

$1,326

$28,352

$350,000

10

Miami

0.66

$109

$1,302

$27,847

$340,000

11

Salt Lake City

0.72

$102

$1,226

$26,258

$293,000

12

Austin, Texas

0.67

$97

$1,158

$24,770

$296,400

13

Portland, Ore.

0.66

$89

$1,064

$22,744

$276,400

14

Raleigh, N.C.

0.68

$88

$1,061

$22,699

$267,500

15

Charlotte, N.C.

0.67

$87

$1,045

$22,356

$267,100

16

Minneapolis

0.66

$82

$984

$21,048

$257,800

17

Dallas

0.68

$82

$980

$20,969

$249,000

18

Phoenix

0.68

$82

$978

$20,929

$248,900

19

Richmond, Va.

0.64

$80

$956

$20,442

$258,900

20

Orlando, Fla.

0.66

$79

$949

$20,288

$247,900

21

Chicago

0.63

$77

$928

$19,822

$255,600

22

Houston

0.68

$77

$921

$19,697

$233,900

23

Bakersfield, Calif.

0.67

$76

$916

$19,601

$234,000

24

Hartford, Conn.

0.65

$75

$904

$19,321

$238,700

25

Fresno, Calif.

0.68

$75

$901

$19,278

$228,400

26

Philadelphia

0.65

$75

$901

$19,260

$238,900

27

Milwaukee

0.63

$75

$899

$19,210

$246,900

28

Grand Rapids, Mich.

0.66

$75

$898

$19,195

$234,000

29

Tampa, Fla.

0.66

$72

$868

$18,572

$225,000

30

New Orleans

0.72

$71

$856

$18,335

$204,300

31

Nashville, Tenn.

0.63

$71

$854

$18,260

$234,300

32

San Antonio

0.67

$71

$853

$18,246

$220,700

33

Atlanta

0.66

$66

$787

$16,838

$204,300

34

Las Vegas

0.52

$66

$788

$16,793

$261,600

35

Birmingham, Ala.

0.56

$65

$784

$16,731

$240,000

36

Pittsburgh

0.63

$64

$769

$16,441

$212,000

37

Albuquerque, N.M.

0.63

$61

$732

$15,634

$201,600

38

Jacksonville, Fla.

0.66

$58

$695

$14,861

$180,600

39

Indianapolis

0.69

$58

$693

$14,818

$173,700

40

Louisville, Ky.

0.67

$57

$681

$14,571

$175,700

41

Kansas City, Mo.

0.59

$56

$673

$14,380

$197,800

42

Columbus, Ohio

0.63

$54

$644

$13,755

$176,500

43

Cincinnati

0.65

$53

$641

$13,698

$169,100

44

St. Louis

0.63

$53

$641

$13,688

$176,500

45

Memphis, Tenn.

0.63

$52

$627

$13,393

$172,700

46

Greenville, S.C.

0.63

$52

$619

$13,230

$170,600

47

Tulsa, Okla.

0.61

$48

$578

$12,358

$163,800

48

Oklahoma City

0.63

$48

$576

$12,315

$158,800

49

Detroit

0.64

$47

$561

$11,997

$150,000

50

Cleveland

0.63

$44

$530

$11,322

$146,000

About LendingTree

LendingTree (NASDAQ: TREE) is the nation's leading online loan marketplace, empowering consumers as they comparison-shop across a full suite of loan and credit-based offerings. LendingTree provides an online marketplace which connects consumers with multiple lenders that compete for their business, as well as an array of online tools and information to help consumers find the best loan. Since inception, LendingTree has facilitated more than 65 million loan requests. LendingTree provides free monthly credit scores through My LendingTree and access to its network of over 500 lenders offering home loans, personal loans, credit cards, student loans, business loans, home equity loans/lines of credit, auto loans and more. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.

MEDIA CONTACT:
Megan Greuling
704-943-8208
[email protected]

SOURCE LendingTree

Related Links

http://www.lendingtree.com

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